Blog: Brand-as-Business Bites™

5.312016

Brand Evolution Problems

This month’s round-up of articles I’ve read focuses on brand evolution problems. Companies usually need to evolve in order to remain relevant to changing customers and to continue to grow. But many have difficulty figuring out how to do so or adapting their organizations.

Take Macy’s for example. Hayley Peterson writes in a Business Insider piece about how the department store is trying to revive its sales by introducing a new retail format. She reports, “In an effort to drive sales and traffic, Macy’s has launched an off-price brand called Backstage. The company is opening dozens of standalone Backstage stores as well as adding Backstage sections to its full-price department stores.” While the move might address customers’ desires for lower prices, Neil Saunders, CEO of the retail consulting firm Conlumino explains why it’s problematic. “This serves to underline that Macy’s is both struggling to make its existing space productive, and that it still lacks the differentiation and brand strength to pull in customers on the back of its full price offer. In our view it is a move that will confuse both the proposition and customers.”

Om Malik explains why Apple is having a hard time evolving in Why Apple Music Is So Bad When the iPhone Is So Good. “Apple may, in fact, clear up some of the mess and present a simpler solution, but its struggles in the delivery of music are merely a symptom of a deeper problem: how to provide Internet services… Apple has always been, and always will be, a hardware-first company… Apple is phenomenally successful, but like Microsoft, which stumbled when Google’s Internet-only, advertising-based businesses took off, it may find it difficult to adapt success to new terrain…Whatever Apple does, it is time for Cupertino to make some quick and bold moves.” So, even though Apple has figured out how it needs to evolve, it may prove incapable of making the change.

Bloomberg BusinessWeek reports on Nestle‘s aspirations to “nutrition, health, and wellness company.” Yes, the largest food company in the world known for chocolate milk and candy bars like Butterfinger and KitKat wants to “invent and sell medicine. The products Nestlé wants to create would be based on ingredients derived from food and delivered as an appealing snack, not a pill, drawing on the company’s expertise in the dark arts of engineering food for looks, taste, and texture. Some would require a prescription, some would be over-the-counter, and some are already on store shelves today.” Nestle is to be commended for trying to address the obesity crisis, but it’s aspiration seems to have an inherent problem. It’s “selling products on one side that might contribute to these illnesses,” says Leith Greenslade, head of the nongovernmental organization JustActions. “On the other side, they’re finding treatments for these illnesses. Some might call that a conflict of interest.”

These are just a few examples of brand evolution problems that demonstrate there are no easy answers to the question of how to evolve. In my free business troubleshooting guide, UNSTUCK, though, I offer some thoughts on how to decide which new business opportunities to prioritize. I hope you’ll find it helpful.

Join the exclusive list of CEOs, entrepreneurs, and other business leaders who receive Denise’s email briefings on brand leadership and receive a free chapter from Denise’s new book — FUSION: How Integrating Brand and Culture Powers the World’s Greatest Companies. Sign-up using the form below.